On February 2, 2011, the Internal Revenue Service ("IRS") issued Notice 2011-12 ("Notice"), in which it announced that employers would have to revert back to the withholding rules in effect in 2005 for FN employees. The Notice was a response to Congress's failure to extend the Making Work Pay credit ("MWPC") in Section 36A of the Internal Revenue Code ("IRC"). The MWPC was adopted in 2005 and allowed the IRS to establish withholding tables for alien employees designed to approximate the income tax liability of nonresident FNs under IRC Section 3402. The withholding rules in effect in 2005 have been incorporated into the current withholding tables for 2011.

Employers are required to implement the 2011 withholding tables by January 31, 2011. Implementation may result in questions by FN employees. The elimination of the MWPC has resulted in the changes.